Quick Take: China to Cut Reserve Requirement Ratio for Some Lenders

China’s central bank announced Sunday it will cut for some lenders the amount of cash set aside as reserves by 50 basis points from July 5.

The reduction in the reserve requirement ratio (RRR) will free up around 500 billion yuan ($76.9 billion) for the five state-owned banks, including ICBC and Bank of Communications, and the 12 national joint-stock commercial lenders, such as CITIC Bank and Everbright Bank, in funding to support debt-for-equity swaps, an unnamed official with the People’s Bank of China said in a statement.

The policy will unleash another 200 billion yuan at medium and small-sized lenders including the Postal Savings Bank and rural banks for loans to small businesses, it added.